Yesterday eMarketer shared its U.S. advertising forecast for 2019, predicting that digital ads will account for $129.3 billion or 54.3% of spending, while traditional ads will drop to 45.8% of the market. eMarketer said it’s the first time digital will surpass traditional in share of market.

Digital has been on a trajectory for years to achieve this milestone, so in a sense there’s no major surprise here. What is a surprise is the outsized role that Amazon is playing in both growing the digital ad market and taking a bigger slice of it - and how quickly this has happened.

eMarketer believes that in 2019 Amazon will take nearly 9% of digital ad spending, chiseling into Google’s and Facebook’s (the “duopoly”) combined share which stood at 60% in 2018 but is forecast to drop to 59.3% in 2019. eMarketer cites Amazon’s “shoppers’ behavioral data for targeting and provides access to purchase data in real time” which was previously only available to advertisers/agencies through retail partners.

Said another way, Amazon’s capabilities are continuing to condition advertisers to create campaigns and measure their conversion success ever more precisely. Of course Google, Facebook and countless other online publishers have been doing this for years. But Amazon’s actual purchase data and the patterns it reveals and can predict are solid gold for advertisers who are trying to squeeze every ounce of ROI from their finite ad budgets.

An even more pressing issue for anyone in the video advertising industry in particular is that Amazon’s growth is going to have profound implications for reallocating traditional TV ad advertising. With Amazon’s multi-pronged foray into the video business (e.g. connected TV devices, award-winning original content, free content services, SVOD aggregation, etc.), a huge amount of new video ad inventory is being created. Some of this can be display or search oriented. But much of it can be brand oriented, in the form of pre, mid and post rolls, all powered by Amazon’s vast customer behavioral and conversion data.

This means more targeted, efficient and effective ads being bought and delivered. Purchased an ice scraper for your car? Here’s a 30-second ad for Timberland boots. Purchased a box of adult diapers? Here’s a 15-second ad for a cardiovascular medication. And on and on it goes. Rather than buying TV ads mainly on Nielsen and other aggregated data, video advertisers on Amazon can be in front of highly specific audiences who have bought correlated products.

Amazon is bringing together all of the pieces to make this a reality. Only the very tip of Amazon’s advertising opportunity has been exposed so far, but that tip is huge - a reported $3.4 billion in ad revenues in Q4 ’18. Now eMarketer is putting further detail to Amazon’s presence with its new ’19 forecast. No doubt both Amazon’s performance and predictions of its future role are only going to grow. And of course if Amazon is growing faster than the overall video ad market, that means it will be stealing share from other players.

Our Sponsors

About VideoNuze

VideoNuze is the authoritative online source for original analysis and news aggregation focused on the burgeoning online video industry. Founded in 2007 by Will Richmond, a 20-year veteran of the broadband, cable TV, content and technology industries, VideoNuze is read by executive-level decision-makers who need to get beyond the standard headlines and achieve a deep understanding of online video’s disruptive impact.